NIM01430 - Class 1 structural overview: Zero-rate of contributions for Armed Forces Veterans: category letters
Regulations 5 and 6 of The National Insurance Contributions Act 2022 (Application of Part 1) Regulations 2022 (SI 2022 No 307)
These regulations provide that where a qualifying veteran (see NIM01415) is:
- a mariner whose employer pays the reduced rate of NICs under regulation 119 SSCR, foreign-going mariners and deep sea fishermen,
- a married woman or widow with a current Married Womens Reduced Rate Election,
- has approval from HMRC to defer the payment of Class 1 NICs in another employment, or
- is over State Pension age
then this relief can only be claimed after the end of the tax year.
It is the employer’s responsibility to ensure the correct category letter has been applied to the assessment of NICs based on the circumstances of the employee.
Before applying the zero-rate of NICs for Veterans, the employer should confirm that the qualifying conditions for both the employer and the employee are satisfied - see NIM01415.
The following National Insurance category letters should be used to apply the zero rate of secondary NICs:
| Existing equivalent category letter | New Veterans category letter | Description |
|---|---|---|
| A | V | standard rate contributions |
| B | None | married women & widows entitled to pay reduced contributions |
| C | None | employees over state pension age |
| J | None | employees who can defer National Insurance contributions |
| G, P, Q, R, T, W, or Y | None | mariners and deep sea fishermen |
There are no veteran equivalent category letters to B, C, G, J, P, Q, R, T, W, or Y. In those circumstances, employers must not use category V and instead use the equivalent NICs category letter. Employers should claim the relief after the end of the year by making a manual claim to HMRC in the same manner as set out in NIM01435 for the transitional year.
If the employee entitles an employer to both the Veteran relief and any other zero rate of secondary contributions (category letters H, M or Z) you should select the most appropriate relief.